2 Defining Organizational DesignWhen managers develop or change the structure they are engaged in Organisation DesignA process involving decisions about six key elements:Work specializationDepartmentalizationChain of commandSpan of controlCentralization and decentralizationFormalizationOrganizational structure can play an important role in an organization’s success. The process of organizing—the second management function—is how an organization’s structure is created.Managers seek structural designs that will best support and allow employees to effectively and efficiently do their work.A. Before we look at the elements of organizational structure and design, we need to define some important terms.1. Organizing is the process of creating an organization’s structure. That process has several purposes2. An organizational structure is the formal arrangement of jobs within an organization.Organizational design is the process of developing or changing an organization’s structure. It involves decisions about six key elements: work specialization, departmentalization, chain of command, span of control, centralization/decentralization, and formalization. We need to take a closer look at each of these structural elements.Kerangka kerja tersebut dinamakan sebagai Desain Organisasi.Bentuk Spesifik dari kerangka kerja organisasi dinamakan dengan Struktur Organisasi

14 Organizational DesignSpan of ControlThe number of employees who can be effectively and efficiently supervised by a managerWidth of span is affected by:Skills and abilities of the manager and the employeesCharacteristics of the work being doneSimilarity of tasksComplexity of tasksPhysical proximity of subordinatesStandardization of tasksSophistication of the organization’s information systemStrength of the organization’s culturePreferred style of the managerThe concept of span of control refers to the number of subordinates a manager can supervise effectively and efficiently.1. The span of control concept is important because it determines how many levels and managers an organization will have2. What determines the “ideal” span of control? Contingency factors such as the skills and abilities of the manager and the employees, the characteristics of the work being done, similarity of employee tasks, the complexity of those tasks, the physical proximity of subordinates, the degree to which standardized procedures are in place, the sophistication of the organization’s information system, the strength of the organization’s culture, and the preferred style of the manager will influence the ideal number of subordinates.The trend in recent years has been toward larger spans of control.Span of management control terkait dengan jumlah orang atau bagian di bawah suatu departemen yang akan bertanggung jawab kepada departemen atau bagian tertentu

16 Contrasting Spans of ControlMembers at Each Level(Highest)Assuming Span of 4Assuming Span of 8111248if one organization has a uniform span of four and the other a span of eight, the wider span will have two fewer levels and approximately 800 fewer managers. If the average manager made $ a year, the organization with the wider span would save over $33 million a year in management salaries alone!31664Organizational Level464512525640966102474096(Lowest)Span of 4:Span of 8:Employees:= 4096Employees:= 4096=Managers (level 1–6)= 1365Managers (level 1–4)

18 Organizational Design (cont’d)CentralizationThe degree to which decision making is concentrated at a single point in the organizationOrganizations in which top managers make all the decisions and lower-level employees simply carry out those ordersDecentralizationThe degree to which lower-level employees provide input or actually make decisionsEmployee EmpowermentIncreasing the decision-making discretion of employeesThe concepts of centralization and decentralization address who, where, and how decisions are made in organizations.1. Centralization is the degree to which decision making is concentrated at a single point in the organization, usually in the upper levels of the organization.2. Decentralization is the handing down of decision-making authority to lower levels in an organization.3. The trend is toward decentralizing decision making in order to make organizations more flexible and responsive.4. Employee empowerment is another term for increased decentralization and is the increasing of the decision-making discretion of employees.A number of factors will influence the amount of centralization or decentralization an organization uses (see Exhibit 9.4).Desentralisasi dan SentralisasiDesentralisasi merupakan proses pendelegasian wewenang dan tanggung jawab secara sistematis ke tingkat organisasi yang lebih rendah. Sentralisasi merupakan proses menahan wewenang dan tanggung jawab di tangan manajemen puncak.LingkunganLingkungan dengan persaingan ketat, berubah dinamis akan lebih sesuai dengan desentralisasi

20 Factors that Influence the Amount of CentralizationMore CentralizationEnvironment is stableLower-level managers are not as capable or experienced at making decisions as upper-level managersLower-level managers do not want to have a say in decisionsDecisions are significantOrganization is facing a crisis or the risk of company failureCompany is largeEffective implementation of company strategies depends on managers retaining say over what happens

21 Factors that Influence the Amount of DecentralizationMore DecentralizationEnvironment is complex, uncertainLower-level managers are capable and experienced at making decisionsLower-level managers want a voice in decisionsDecisions are relatively minorCorporate culture is open to allowing managers to have a say in what happensCompany is geographically dispersedEffective implementation of company strategies depends on managers having involvement and flexibility to make decisionsUkuranSemakin besar ukuran organisasi, desentralisasi semakin diperlukan.Faktor LainJika keputusan berisiko tinggi maka sentralisasi lebih sesuai. Bawahan yang mempunyai kemampuan tinggi sesuai dengan desentralisasi.

22 Organizational Design (cont’d)FormalizationThe degree to which jobs within the organization are standardized and the extent to which employee behaviour is guided by rules and procedures/Tingkat di mana pekerjaan dalam organisasi dibakukan.Highly formalized jobs offer little discretion over what is to be doneLow formalization means fewer constraints on how employees do their workFormalization refers to the degree to which jobs within an organization are standardized and the extent to which employee behaviour is guided by rules and procedures.1. In a highly formalized organization, employees have little discretion, and there’s a high level of consistent and uniform output. Formalized organizations have explicit job descriptions, lots of organizational rules, and clearly defined procedures.2. In a less-formalized organization, employees have a lot of freedom and can exercise discretion in the way they do their work.3. Standardization not only eliminates the possibility that employees will engage in alternative behaviours, it even removes the need for employees to consider alternatives.4. The degree of formalization can vary widely between organizations and even within organizations.

24 Organizational StructureWork SpecializationThe degree to which tasks in the organization are divided into separate jobs with each step completed by a different personOverspecialization can result in human diseconomies from boredom, fatigue, stress, poor quality, increased absenteeism, and higher turnoverWork specialization is the degree to which tasks in an organization are divided into separate jobs. Most managers today see work specialization as an important organizing mechanism but not as a source of ever-increasing productivity.

26 Departmentalization by TypeFunctionalGrouping jobs by functions performedProductGrouping jobs by product lineGeographicalGrouping jobs on the basis of territory or geographyProcessGrouping jobs on the basis of product or customer flowCustomerGrouping jobs by type of customer and needsDepartmentalization. Once work tasks have been defined, they must be grouped together in some way through a process called departmentalization—the basis on which jobs are grouped in order to accomplish organizational goals. There are five major ways to departmentalize (Exhibit 9.2):1. Functional departmentalization is grouping jobs by functions performed.2. Product departmentalization is grouping jobs by product line.3. Geographical departmentalization is grouping jobs on the basis of territory or geography.4. Process departmentalization is grouping jobs on the basis of product or customer flow.5. Customer departmentalization is grouping jobs on the basis of common customers.6. Two popular trends in departmentalization include:a. Customer departmentalization continues to be a highly popular approach because it allows better monitoring of customers’ needs and responding to those changes in needs.Cross-functional teams, a hybrid grouping of individuals who are experts in various specialties (or functions) and who work together, are being used along with traditional departmental arrangements.Pengelompokan Kerja (Departementalisasi)Mengelompokkan pekerjaan yang sama atau mirip satu sama lain, berdasarkan kreteria tertentu, ke dalam satu atap tertentu.Bedasarkan fungsi, produk, lokasi, dan pelanggan.

31 Process DepartmentalizationPlantSuperintendentProcess departmentalization is grouping jobs on the basis of product or customer flow.SawingDepartmentManagerLacqueringand SandingDepartmentManagerInspection andShippingDepartmentManagerPlaning and MillingDepartment ManagerAssemblingDepartmentManagerFinishingDepartmentManager+ More efficient flow of work activities– Can only be used with certain types of products

32 Customer DepartmentalizationDirectorof SalesCustomer departmentalization is grouping jobs on the basis of common customers.Manager,Manager,Manager,Retail AccountsWholesale AccountsGovernment Accounts+ Customers’ needs and problems can be met by specialists– Duplication of functions– Limited view of organizational goals

33 Standardization*the process of developing and agreeing upon technical standards. A standard is a document that establishes uniform engineering or technical specifications, criteria, methods, processes, or practicesStandards can be:de facto standards which means they are followed by informal convention or dominant usage.de jure standards which are part of legally binding contracts, laws or regulations.Voluntary standards which are published and available for people to consider for useCakupan variasi yang dapat di toleransi dalam lingkup peraturan yang menetapkan sifat pekerjaan.

34 Organizational Design DecisionsMechanistic OrganizationA rigid and tightly controlled structureHigh specializationRigid departmentalizationNarrow spans of controlHigh formalizationLimited information network (mostly downward communication)Low decision participation by lower-level employeesOrganic OrganizationHighly flexible and adaptable structureNonstandardized jobsFluid team-based structureLittle direct supervisionMinimal formal rulesOpen communication networkEmpowered employeesOrganizations don’t have the same structures. Even companies of similar size do not necessarily have similar structures.A. Mechanistic and Organic organizational forms1) A mechanistic organization is an organizational structure that’s characterized by high specialization, rigid departmentalization, narrow spans of control, high formalization, a limited information network, and little participation in decision making by low-level employees.2) An organic organization is a structure that’s highly adaptive and flexible with little work specialization, minimal formalization, and little direct supervision of employees.3) When is each design favoured? It “depends” on the contingency variables.

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